GameStop Plans Stock Split

Logan Frederick

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Aug 19, 2006
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GameStop Plans Stock Split

GameStop plans a stock split to invite more investors.

Game retailer GameStop informed the investment community that it will be splitting its stock two-for-one, in order to attract more investors with a lower price. On February 20th, along with a dividend payment, shareholders will be attributed one share of the company for every share they already hold. Shares will be distributed on March 16th and will result in 152 million outstanding shares.

The split will be GameSpot's first since its public offering in February 2002. In addition, GameSpot's board has approved the buyback of $150 million worth of Senior Floating Rate Notes and Senior Notes.

GameStop CEO Richard Fontaine added onto his company's announcements. "As GameStop continues to rapidly grow, we wanted to make our stock more attractive to a broader range of potential investors. This stock split also reinforces the confidence that the Board and I have in the GameStop buy, sell, trade strategy and the future of video game growth worldwide."

All the good news has not helped bolster the stock price, which closed Monday at $53.04, down .49 cents for the day. Since the end of the holiday season, the stock has lost momentum, falling eight percent in the past month.

However, many investors are excited for the stock split and spot a buying opportunity. Michael Pachter of Wedbush Morgan Securities sent a note to the investment community concerning the GameSpot announcements: "We continue to believe that the shares present an attractive opportunity for appreciation, particularly to investors with a time horizon of greater than one year, and advise investors to opportunistically add to positions."

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